Analyzing Toyota Motor Corporation using Nadler Tushmans Model

Analyzing Toyota Motor Corporation using Nadler Tushmans Model The Nadler Tushman’s model is a model that is used to analyze an organization in terms of its inputs, outputs as well as throughputs. This model was developed with consistency to the open systems theory. Nadler Tushman’s model was developed in such a way that it gives more specific details, thus it is more favourable in analyzing an organization compared to the open system theory.Advertising We will write a custom essay sample on Analyzing Toyota Motor Corporation using Nadler Tushman’s Model specifically for you for only $16.05 $11/page Learn More The model was developed in the 1980s by two men namely, M. L. Tushman and David A. Nadler. This model gives specifications on the critical inputs required by an organization, the critical outputs, as well as any transformational processes that may be required and that characterize the running of an organization (Nadler and Tushman 37). The principle under which this model was developed stat es that the performance of an organization is determined by four elements. The four elements are: culture, people, structure, and task. The four elements need to be compatible with each other to ensure better organizational performance. When the compatibility is high, the performance of the organization is also greater. Source: Mind Tools Ltd (para. 6) This model emphasizes more on the transformational processes that have the ability to improve the performance of an organization. Change is very critical for any organization, especially in the current business environment. Competition has been at the highest level more than any other time in the past. These act as stimuli to initiate changes in the way organizations do their businesses. For the best change to be implemented, it is important to first understand the critical organizational inputs and the critical outputs. It is important to note that the critical inputs and outputs determine the performance of the organization. Once t he organization has the right inputs, it is more likely to have better outputs and register better performance.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More When analyzing an organization using the Nadler Tushman’s congruence model it is important to consider the key individuals who are involved in running the organization, the components of the environment, the strategies that the organization follows, as well as both formal and informal systems. These determine the output of an organization. This essay will analyze Toyota using the Nadler Tushman’s congruence model. The Environment Each organization exists and operates in an environment. There are both internal and external environments that influence the performance of an organization. While the managers and leaders of an organization have the ability to control the internal environment, the external environm ent is beyond their control despite the fact that it also has major impacts on the organizational performance. Among the factors that impact the running of an organization and that are external include institutions, groups, events, as well as individuals. Legal aspects, economic and social factors also make up the external environment. It is important to note that customers also play a key role in the external environment of any business organization. If the customers are few, then the organization is likely to have a poor overall performance. Therefore, it is the responsibility of the managers and leaders to ensure that they put in place strategies that have the ability to attract a large number of customers to increase the level of sales and income simultaneously (Nadler and Tushman 40).One of the ways to assess the performance of an organization is its profitability. Other environmental factors that should also be considered include, but are not limited to technology, competitors and labour unions. Toyota is a motor vehicle producing company that is based in Japan. The company was founded by a man known as Kiichiro Toyoda in the year 1937. Toyota is among the largest companies in the world, ranking 11th in terms of revenue. Toyota ranks third, after General Motors (GM) and Volkswagen Group (Toyota Motor Sales para 1). The company’s performance is influenced by a number of environmental factors, both internal and external. For instance, there is a lot of competition in the automobile industry in the world today. Companies that deal in automobiles are emerging at a high rate, while the existing ones are continually coming up with ways of improving their business. Competitors have the ability to impact the performance of the organization. When the competition is very high, the performance of Toyota is likely to go down and vice versa. Competition might call for implementation of a transformation process in order to maintain the performance. Toyota is a multinational company, thus it has many competitors and it should be on toes strategizing how to deal with the competition. Among the competitors include General Motors, Ford, Volkswagen, KIA, Chrysler, Honda, Daimler and Mercedes. It is important to note that the competitors could either be a group of subsidiaries or individual companies.Advertising We will write a custom essay sample on Analyzing Toyota Motor Corporation using Nadler Tushman’s Model specifically for you for only $16.05 $11/page Learn More Events that happen outside the company are also likely to affect its performance and the desired outcomes. Events such as promotions from competitors are likely to pull customers away and negatively affect the performance. There are other risky events that are likely to affect the company’s business. For instance, the earthquake that happened in Japan in the year 2011 had significant effects on the general company’s economy. This ea rthquake contributed to the suspension of operations by Toyota as a result of the damages that it caused to the country’s infrastructure, transport systems and energy supply. The tsunami and the nuclear power plant accidents, among other events, are also likely to affect Toyota’s business. Such events are not predictable, yet they have very significant effects on any business organization. Economic and social environments also have the ability to affect the ability to affect the business of Toyota. The economic environment affects the business in a way, whether the economic environment is favourable or unfavourable. Toyota is affected by both the economic situation in its home country Japan and in the international market. Among the factors that affect the economy include taxation rules, trends in the international trade and markets, the disposable income of the citizens, as well as the market forces of demand and supply. The exchange rates and inflation rates also aff ect Toyota’s business since they influence its income (Müller 54). The world has been in a state of economic growth slowdown over the last couple of years. Toyota is among the companies that pillar the world’s economy. Therefore, its performance highly influences other industries such as the steel business, plastic industry, as well as the glass industry. The slow growth of the economy affected the Toyota business and the related industries. This led to changes in HR policies of Toyota in order to cope up with the economic situation. Among the policy changes that were implemented include recruitment policies where the company started recruiting staffs that have the ability to help it perform well in such economic situations, layoffs due to difficulties in paying too many personnel owing to the reduced income earned, and relocation of staffs among other changes. Technological factors are also part of an organization’s environment. There has been rapid technol ogical development that has emerged over the last few decades. This has facilitated innovation in industries and companies. Technological development has a significant effect on the transformation process of an organization.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Toyota has made huge investments in technology. This has been a key factor that has contributed to the company’s global success. The company has always pioneered technology in the automobile industry. Toyota is known for its dedication in technology, having been associated with numerous innovation initiatives, funding research projects, as well as initiating replacement mechanisms. The technology trends that go on in other companies that deal in automobiles have the ability to impact the transformation process of Toyota (Müller 55). For instance, competitors are likely to take competitive advantage over Toyota if they come up with a new innovative strategy. As a consequence, Toyota will lose some of its customers and revenues. For it to avoid such losses, Toyota will have to develop a transformation strategy that will help it maintain its position in the market, or even better its current position. Companies should implement transformational strategies that will help them cope with the fast hanging technological environment. Toyota might be required to implement some HR policy changes in order to deal with the technological changes. The management will be required to hire people who have the ability to transform the organization in a manner that the company will keep up with the trends in technology. Strategy As mentioned earlier in this article, Toyota is one of the largest companies in the world in terms of revenue and size. Toyota has been able to penetrate most markets globally. It is never easy for a multinational organization to make it in the international market, especially if it does not have a good strategy. The success of Toyota in the international market is an indication that the company has a good strategy that has helped in boosting its business and markets its products. It is worth noting that the strategies that a multinational organization applies in its business vary from country to country since each of the countries in which it operates has its own culture and needs. Therefore, the organizational success in the global market will highly depend on the company’s ability to lay out the best strategy in each of the various countries in which it operates. This calls for leaders and managers who are highly knowledgeable and skilful. Toyota Motor Corporation has able leaders who have been able to align its strategy with its business objectives. Toyota’s goal is to pursue a harmonious growth and ensure that its profitability grows consistently. All strategies are developed to address the company’s goal, while all employees as well as managers pursue their duties in line with the achievement of this objective. The mission statement of an organization is important in developing its strategy. Any strategy that is put in place should be guided by the company’s mission statement (Nadler and Tushman 40). The mission statement for Toyota is to develop and provide innovative, safe and outstandi ng high quality products and services that meet a wide variety of customers demands to enrich the lives of people around the world† (Toyota Motor Sales para 1). Therefore, the strategies that the company develops should embrace innovation and ensure that the products are of high quality. Every customer wishes to get the best value for the money they pay. In order for Toyota to maximize consumer satisfaction, it has to come up with strategies on how to produce products that are innovative and of high quality. Cost is crucial; therefore, the strategies developed try to minimize cost as much as possible. Consumer satisfaction is higher when customers get the best quality at relatively low price. Toyota came up with a principle that is popularly known as ‘the Toyota way’ that was aimed at making the values and beliefs of the company clear of all employees. All employees are supposed to act in a manner that they embrace these values that are also the principles that gu ide Toyota. Knowledge is vital for innovation to take place. As a result, Toyota employees knowledgeable personnel as one of its strategies to ensure that it produces high quality goods that are innovative and that maximize consumer satisfaction. The Toyota Motors Corporation prioritizes North America and then Japan at second, although recently China has become one of the top priorities in developing Toyota’s global strategy. China is considered not to be a very mature automobile market, but it is starting to thrive. Toyota has come up with a three stage strategy that it will use to penetrate the China market. The first step will be to establish a network of sales in China and promote its brands. This is a strategy that is aimed at making the potential customers aware of Toyota brand and its products. Customers are known to buy most products that they are aware of. Therefore, establishing sales networks and promotion will be important in making the brand known to locals. The next step would be to establish bases where the company will manufacture auto parts. This will help in reducing the costs of operation and ensuring effective supply chains. An effective supply chain gives the company competitive advantage and enhances marketing (Müller 57). The third and final strategy that the company is to apply in China is to form joint ventures with the local companies that deal in automobile production. This will enable Toyota to market itself easily. It will also reduce the cost that will be spent for marketing the company. It is easier for Toyota to win the loyalty of Chinese customers by forming joint ventures with local organizations. One of the general strategies that Toyota applies in its business is that it has a management system that is involved in making marketing and other decisions. The management system is also aimed at ensuring that the company’s operations run as expected to facilitate the achievement of its goals and objectives. Leade rship is crucial in the success of any organization. Leaders facilitate transformational processes, as well as any other change that can improve the performance of an organization. Toyota’s use of a management system that facilitates its decision making processes is a strategy that helps it improve on its performance and facilitates transformational process (Müller 54). Good decision making is an input that can positively impact an organization. The output of good decisions will be success. The other strategy that the company applies is that it has a system that establishes a problem solving platform that gives the best solution to problems that are likely to affect its business. This system also develops measures to prevent any problem that is likely to affect the company’s business. When a problem is detected, it is flagged to the relevant department or individuals for a solution to be found. The departments come with the best solution to the problem. This keeps the Toyota Motor Corporation in the competition. Tasks This refers to the various duties that the organization and its parts are required to perform in order to facilitate transformational process and the success of the organization. An organization is made up different parts, each of which has its own rules that it is supposed to execute. Proper execution of tasks will lead to success of the organization, while poor task performance will negatively impact transformational processes. Tasks are aimed at continually improving the organization in general and improving the quality, as well. It is important to ensure that each individual is assigned the task he or she can best perform in order to execute tasks accordingly (Nadler and Tushman 40). The issues of division of labour and specialization best apply here. Labour duties are divided according to specialization of different employees, departments and parts of an organization. Toyota Motor Corporation is a company that has various o perational parts, all of which are aimed at achieving the same objective. The objective is to constantly ensure growth of the company and consistent increase in profitability. Automobile manufacture is an industry that has to coordinate the various parts for its success. For instance, different parts of a vehicle are manufactured differently and then assembled to make up the moving vehicle. Once the vehicle is completed, it has to go through the supply chain and then to the marketing department. All these departments are expected to perform their tasks with a similar objective (Toyota Motor Sales para 2). In performing their tasks, employees of Toyota Motor Corporation are guided by the principle of: â€Å"The Toyota Way†. Each employee is aware of the tasks that they are supposed to play in order to ensure that they adhere to this guiding principle (Müller 53). Employees are made to understand the values and beliefs of the company. They are, therefore, expected to embrac e these beliefs in performing their duties. It is imperative to note that all tasks at Toyota are standardized under this principle. Every member of the organization is aware of the duties they are supposed to carry out, in spite of the country in which they operate. As a result, an engineer of the Toyota Company, for example, will find identical processes in whichever company he or she walks in throughout the world. The company produces products that are of similar design, in additional to the similar processes. The manufacturing equipment that is used is also similar. It can, therefore, be said that this principle influences the transformational processes of the company. It is an important part of the organizational input. The tasks that are performed under the principle are the inputs that have made Toyota what it is today. It is because of these tasks that the company has become among the best in the world. Formal systems These refer to the structures, as well as the methods and processes that an organization uses in order to ensure that each department and each individual performs their duties accordingly in order to achieve the required goals (Nadler and Tushman 40). The strategies are usually written down, and each employee and member organization is aware of what they are supposed to do. There is a formal structure that everyone is expected to understand at Toyota. The employees follow the structure in performing their duties. The structure determines the tasks that each individual is supposed to carry out. In addition, the formal system defines the way each objective should be achieved. The key individuals People form a very important part of an organization. The success of an organization depends on the key individuals and their knowledge and ability to produce results. Work has to be done for an organization to succeed and it is the people who do that work (Nadler and Tushman 45). Therefore, there is no work that can be done without the people and n o success for the organization can be achieved. At the same, time no transformational process can take place. There are some activities that are critical to the organization and which have major effects on its performance. One should know the type of people who performs such tasks. In addition, it is important to ensure that such critical tasks are performed by people who have the right skills and knowledge. For instance, decision making is a very major task for any organization. A wrong decision will have devastating results for the organization, while a good decision will deliver the required output. Therefore, decision makers should be able people who will reduce or eradicate the risks associated with decisions through making the right decisions. One should first know the people who they interact with when evaluating the people in an organization in order to perform a certain task. Then it is important to know the skills possessed by the different personnel. Demographics and empl oyee preferences are also an important factor to consider (Mind Tools Ltd para 10). People are the key to the organizational success at Toyota. Innovation is vital in the automobile industry, and only the people can guarantee innovation. Employees at Toyota operate in an environment where they come across a lot of challenges (Müller 53). The employees are required to constantly develop new ideas to make the organization better each day. The company believes that the employees hold the key to its success and they are considered as key individuals. Employees are not viewed as just hands for doing the jobs, but they are viewed as sources of knowledge and wisdom. As a result, Toyota invests heavily in people. The key leaders who are responsible for the running of the company are: the president, the vice president, the chairman, and the board members, as well as various managers and directors. All these people together with the rest of the employees have to interact to produce Toyota ’s output. This is what facilitates the company’s success. Issues that the organization should address Toyota ranks as one of the best companies in the world in terms of performance. The company has been able to address most of the issues that might hinder its success. The company has able leaders and employees who constantly come up with innovative ideas that have kept the company going for a long time. However, there is one issue that needs to be addressed to maintain the company’s competitiveness. The automobile industry is very competitive with different companies, all striving to get a large share of the market. This is an issue that Toyota needs to focus on since it might lead to loss of customers to competitors. The issue of competition holds a significant impact on the company’s success. Technology is increasingly becoming important for the competitiveness of automobile companies. It is important to note that other companies are working tirelessly to improve their technology and become the best, despite the fact that Toyota is a leader in technology and innovation. Toyota should, therefore, step up its innovation in order not to lose its competitive advantage. Aspects that have difficulty understanding Toyota is a multinational company with operations in different countries across the world. Managing a multinational is one of the most challenging tasks since the company has to operate in different culture. In spite of this, the company is still expected to produce results. Different cultures have different preferences and different buying behaviors. Therefore, it was difficult to understand how vastly Toyota manages to implement its principle of â€Å"The Toyota Way† in all the nations where it operates, despite these destinations having different cultures. This principle gives a standardized way of performing tasks in all Toyota companies across the world. One might need to access the company physically to conduct an interview to help in this analysis. Alternatively, accessing the finest details in the company website might also be helpful, although it is not easy to get all the details through this method. Mind Tools Ltd. â€Å"The Congruence Model: Aligning the Drivers of High Performance.† Mind Tools. 2013. Web. https://www.mindtools.com/pages/article/newSTR_95.htm Müller, Christoph. Case Study and Comparative Strategic Analysis of Toyota and Ryanair: The Key Differences in the Operations Strategy of Manufacturers and Service Firms in Terms of Process Design, Supply Chain, Human Resources, Capacity, Innovation and Quality Management. München: GRIN Verlag GmbH, 2011. Print. Nadler, David and Tushman Michael. â€Å"A Model for Diagnosing Organizational Behavior.† Organizational Dynamics 1980. 9 (2), 35-51. Print. Toyota Motor Sales. Explore Toyota. 2013. Web. https://www.toyota.com/